Aussie cannabis company on the verge of milestone deal with Israel

Aussie cannabis company on the verge of milestone deal with Israel

While many Aussie cannabis companies have hunted for opportunities in Canada this week, Queensland Bauxite (ASX: QBL) is doing deals in other parts of the world.

Historically a mining company, Queensland Bauxite made a name for itself as one of Australia's leading medical cannabis companies through its acquisitions of Medical Cannabis Limited (MCL) and Medcan Australia.

Medcan today announced that it has entered a memorandum of understanding (MOU) with an Israeli company called Pharmocann.

Under the proposed 50/50 joint venture, Medcan will manufacture Pharmocann's range of products for international distribution, as Israel does not allow export of cannabis products.

The two companies will collaborate on clinical trials which will take place in both Australia and Israel.

Pharmocann will provide resources including IP, operating procedures, recipes and manufacturing techniques while Medcan will be responsible for providing the raw materials for production, manufacturing and export.

An IPO for the joint venture will also be on the cards as both companies look to rapidly expand their businesses.

Medcan CEO Craig Cochran says the MOU regarding the joint venture is a welcome resolution of lengthy talks between both companies.

"We are excited to have finally entered into this MOU with Pharmocann after being in detailed discussions with them since early 2017," says Cochran.

"Pharmocann are one of the top Israeli medical cannabis companies and have developed a unique range of products which are showing extraordinary results in clinical trials.

"Their expertise in the medical cannabis field is well recognised globally and we are excited to have access to a skillset and product range of this calibre."

The costs of the joint venture have not yet been assessed, however the deal is not expected to have any material cost impact on parent company Queensland Bauxite.

It is expected that any initial funds required will come under Medcan's operational costs.

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